In a recent appearance on CNBC’s TechCheck, Block co-founder Jim McKelvey has suggested that the rate of disruption by crypto-focused firms in the payments sector is increasing.
The burst of firms that had come out to capture the mantle of payments, including Block, have seen a reduced pace of growth in recent days due to several matters, including regulation.
McKelvey, however, disagrees with the idea that disruption will take longer than expected. The American billionaire investor explained that with increasing innovation in payments, the space is building “an increasingly fast rate of disruption throughout the entire market.“
Bitcoin because of its unique properties
In the same interview, the inclination of Block’s other co-founder (Jack Dorsey) towards Bitcoin came up. Dorsey, the former Twitter CEO, has on several occasions in the past appeared to show exclusive preference of Bitcoin over any other altcoins or crypto products.
While McKelvey held that he himself isn’t a Bitcoin maximalist, he noted that Block believes in the significance of Bitcoin as a technology even if there isn’t 100% certainty on its future.
He added that though Dorsey maintains insistence on Bitcoin rather than other crypto assets, he has historically been able to break into new spaces such as Bitcoin quite early. The venture capitalist explained that Block’s position in Bitcoin is due to the asset’s unique traits, ideally due to its high decentralisation, hence guided by the community.
“It’s the response from the community that’s actually more exciting than the currency itself,” he added.
Block, as a disruptor, has survived worse
While digital payments firms such as Block are still way off from flipping legacy market leaders in payments such as Visa and MasterCard, they have come a long way already. Block was founded in 2009, and one of its biggest challenges to date is the ‘Amazon effect’ it nearly succumbed to in 2014.
In a separate discussion with CNBC last week, Jim McKelvey said that when Amazon Register launched in 2013, Block was still a mere start-up, but the Jeff Bezos-led company offered a 1.75% processing fee against Block’s 2.75%.
“When Amazon does this to a start-up, the start-up dies. When Amazon did that to Square, we were terrified,” he explained.
While such action by Amazon likely meant doom, the now-fintech mammoth withstood the undercutting market giant, withheld the pressure, and outlasted Register within one year. The retail giant attributed the decision to close the payments service to tough competition in the digital payments sector.